Australian airline major Qantas has agreed to pay AUD 100 million (USD 66.1 million) penalty to settle a legal case where it was accused of selling thousands of tickets for flights it had cancelled.

Under the settlement agreed with the Australian Competition and Consumer Commission (ACCC), Qantas will commence a projected USD 20 million remediation program for impacted passengers, with payments to customers ranging from USD 225 to AUD 450, and subject to the approval of the Federal Court of Australia, will pay a AUD 100 million civil penalty.

The ACCC and Qantas will shortly seek approval of the proposed penalty by the Federal Court.

Qantas said it intends to commence the remediation program in advance of the Court approval process.

Qantas Group CEO Vanessa Hudson said: “Today represents another important step forward as we work towards restoring confidence in the national carrier.

“When flying resumed after the COVID shutdown, we recognise Qantas let down customers and fell short of our own standards. We know many of our customers were affected by our failure to provide cancellation notifications in a timely manner and we are sincerely sorry. The return to travelling was already stressful for many and we did not deliver enough support for customers and did not have the technology and systems in place to support our people," Vanessa Hudson said in a statement.

“We have since updated our processes and are investing in new technology across the Qantas Group to ensure this doesn’t happen again," the Qantas Group CEO said.

“We thank the ACCC for their cooperation in reaching this outcome, which means we can compensate affected customers much sooner than if the case had continued in the Federal Court. We are focused on making the remediation process as quick and seamless as possible for customers," Vanessa Hudson said.

Those impacted customers will receive AUD 225 for domestic/trans-Tasman flights and AUD 450 for international flights. This is on top of any refund or alternative flight already offered to these customers, read a statement issued by Qantas.

ACCC Chair Gina Cass-Gottlieb said: "We are pleased to have secured these admissions by Qantas that it misled its customers, and its agreement that a very significant penalty is required as a result of this conduct. The size of this proposed penalty is an important milestone in enforcing the Australian Consumer Law."

The ACCC launched Federal Court action against Qantas in August 2023 alleging that, between 21 May 2021 and 7 July 2022, Qantas advertised tickets for more than 8,000 cancelled flights.

It was also alleged that, for more than 10,000 flights scheduled to depart in May to July 2022, Qantas did not promptly notify existing ticket holders that their flights had been cancelled.

Qantas has now admitted that its misconduct continued from 21 May 2021 until 26 August 2023, affecting tens of thousands of flights scheduled to depart between 1 May 2022 and 10 May 2024.

“We acknowledge Qantas’ cooperation in ultimately deciding not to contest this case, admitting that the conduct occurred for a longer period, and seeking to resolve this early and for the benefit of consumers,” Cass-Gottlieb said.